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Opposition mounts to Barroso’s agri-fund plan

A bid by European Commission President José Manuel Barroso to divert surplus European Union funds to the world’s poorest farmers is running into opposition in the Commission, the European Parliament and the national capitals. Barroso wants to provide €750 million this year and €250m in 2009 to help developing countries. But the idea is meeting resistance over the principle and the practice.

Speaking at an outreach meeting with African leaders during the G8 summit in Japan, Barroso proposed setting up a €1 billion facility to support agriculture in developing countries. In the face of high food prices, this would be using “unspent Community funds in a creative and positive way”, he said. Barroso’s declared aim is “to generate a strong and rapid agricultural supply response” – for instance, promoting agricultural production by improving poor farmers’ access to better fertilizers and seeds.

But German Chancellor Angela Merkel, also speaking at the G8 summit, said that “the last word has not yet been spoken” on the matter. Her remarks were amplified by Horst Seehofer, Germany’s agriculture minister, who said yesterday (9 July) that he did not support the idea of Common Agriculture Policy money being transferred for this purpose. Diplomats interpret the comments as a reflection of general German scepticism over using any EU money for purposes other than those for which it was originally budgeted.

The Commission has been pushing the idea of diverting funds for several months. The idea was mooted by Mariann Fischer Boel, the European commissioner for agriculture, on a visit to the Parliament in May and she brought it up again at an informal meeting of EU agriculture ministers the same month. The idea was then raised by Barroso before and during the European Council in Brussels on 19 June.

Transfer concerns

Within the Parliament, there are reservations over the manner of any such transfers. Jutta Haug, a German centre-left MEP, who is drafting the Parliament’s position on the 2009 budget, said it was essential that the EU was seen to be the source of the €1bn. She wants the money to be spent directly by the Commission, rather than being paid to other international organisations such as United Nations bodies. “We’re the biggest aid donor but we don’t have the visibility,” she said. Barroso has suggested using the World Food Programme, a UN body. Haug said that the Parliament had concerns about whether EU funds given to other international organisation were managed to the same standards of transparency and accountability as money directly administered by the Commission.

The divisions are likely to feed into a meeting in Brussels next Thursday (17 July) of budget ministers from the member states. The meeting, which will be attended by representatives of the Parliament, is already faced with the dilemma of agreeing further cuts in the EU’s 2009 budget while at the same time providing extra funds to tackle the global food price crisis and to help struggling fishermen. Ministers want to cut the budget to €115bn in terms of payments, €1.7bn lower than the Commission proposed in May. The Commission’s proposal was already 3.3% or €3.9bn lower than actual spending in 2008.

Barroso’s desire to redirect unspent farm subsidies to developing countries does not yet have official Commission backing. A formal proposal to divert the money is not expected for two weeks, because of internal procedures and differences about which part of the EU budget the money should be paid from.